Principal Issues: 1. Whether a taxable benefit arises for employee travel between home and a work location where an employee has multiple work locations and multiple employers? 2. Whether an employee can deduct travel expenses under the same set of facts?
Position: Question of fact.
Reasons: See response
XXXXXXXXXX
2013-050742
P. Waugh
February 11, 2014
Dear XXXXXXXXXX:
Re: Reimbursement for Travel Expenses
We are writing in response to your email dated October 2, 2013, in which you asked for our comments regarding the tax implications for travel expenses when an individual works for multiple employers. In the scenario described, an individual performs employment duties for two separate companies (Company A and Company B). Company A pays the individual and invoices Company B for a percentage of his or her remuneration.
Our Comments
This technical interpretation provides general comments about the provisions of the Income Tax Act (Act) and related legislation (where referenced). It does not confirm the income tax treatment of a particular situation involving a specific taxpayer but is intended to assist you in making that determination. The income tax treatment of particular transactions proposed by a specific taxpayer will only be confirmed by this Directorate in the context of an advance income tax ruling request submitted in the manner set out in Information Circular IC 70-6R5, Advance Income Tax Rulings.
In general, travel between an individual's home and regular place of employment (RPE), whether on a part-time or full time basis, is considered personal. Where an individual receives a reimbursement from, or is provided with an allowance by an employer in respect of personal travel, the amount is generally taxable under paragraph 6(1)(a) or 6(1)(b) of the Act, respectively, unless it falls within the exceptions listed in subparagraphs 6(1)(a)(i) to (v) or 6(1)(b)(i) to (ix) of the Act. Further, where the travel is considered personal, the individual cannot claim a deduction for travel expenses under the Act.
While it is always a question of fact whether a particular location is considered a RPE for an employee, it is the view of the Canada Revenue Agency that an individual may have more than one RPE, even with multiple employers. A particular location may be considered a RPE even though the individual may only report to work at that particular location on a periodic basis (e.g., once or twice a month) during the year. However, depending on the circumstances and facts, a location may not be a RPE for an individual if, for example, the individual works at that particular location only once during the year or perhaps for only a few days in the year.
If an individual has multiple RPEs and travels between them during the day, the trip from the individual's home to the first RPE and the trip from the last RPE to home is personal travel. Generally, travel by an individual between RPEs is considered employment-related. However, the primary purpose of the trip must be considered in determining whether or not this is the case. Where an employee travels to an RPE to reduce or avoid personal travel, this travel would not be considered employment-related.
We trust these comments will be of assistance to you.
Yours truly,
Nerill Thomas-Wilkinson, CPA, CA
Manager
for Director
Business and Employment Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
